Inequality of Opportunity and Outcomes in Asia: A Gendered Perspective

Yana van der Meulen Rodgers, Rutgers University Joseph E. Zveglich Jr., Asian Development Bank January 17, 2012 Asian Development Bank ERD Seminar
The views expressed in this paper are the views of the author and donot necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts noresponsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.

Intro: Gender Perspectives on Inclusive Growth

Equality of opportunity and outcomes are related and self-reinforcing Equality of opportunity Associated with formal, legal equality in access to education, health services, and employment But also equality in decision-making and voice within the household Equality of outcomes Includes equality in income, wealth, and assets

Intro: Gender Perspectives on Inclusive Growth

Labor force participation is viewed as both an opportunity and outcome As an opportunity, labor force participation enables women to Ability to enhance individual and household income and wealth Greater say over household decisions (such as childrens education) As an outcome, labor force status has an intrinsic value Income-earning production viewed differently from uncompensated household production Enhanced status itself has value

Links between Growth and Gender Inequality

Growth affects gender inequality Complex dynamic (Figure 1) Growth has led to reductions in disadvantages faced by women, especially in educational attainment, life expectancy, and labor force participation. Yet growth does not necessarily mean inequality will decline, especially if women continue to face constraints in obtaining new, well-paid employment opportunities Gender inequality affects growth Can enhance short-run growth (such as by providing low-wage labor to export sectors) But inequality in education and employment can act as a drag on long-term growth

Drivers of Labor Market Opportunities

Informal Institutions

Households Markets

Labor Market Opportunities

Formal Institutions

G DP Gr o w

th

Source: World Bank (2011)

In Asia, womens labor force participation varies widely

Sub-region Central & West Asia East Asia South Asia Southeast Asia The Pacific Developed Members 1990 55% 53% 39% 62% 49% 52% 2010 55% 54% 45% 62% 52% 57%

Labor force participation drops and then risesacross Asian countries in 2010

Note: All data are for 2010 or the closest year available. GDP per capita is adjusted by PPP indices, in constant 2005 international $.

Labor force participation drops and then rises over time

U-shape also seen in long historical US time series

Factors driving the U-shape

Industrial transformation Shift away from agriculture production to manufacturing/industry and later to services Stigma against womens manual work, but no such stigma for white collar work Income effects Rising male wages allows for labor specialization within the household But also leads to smaller families Changing social attitudes Evolution in womens work Rising education levels

Case Studies Using Micro-Level Data

Manpower Utilization Survey (MUS) Annual data for Taipei, China spanning 19782010 Demographic and Health Surveys (DHS) South Asia: Bangladesh, India, Maldives, Nepal, and Pakistan Southeast Asia: Cambodia, Indonesia, and Philippines The Pacific: Timor-Leste Data from 20052009

Manpower Utilization Survey

Take advantage of the long time series to explore: Effect of demographic change on womens labor force participation Driving factors behind changing labor force participation for different age groups How drivers of employment decisions over time compare with drivers across countries Under preparation

The DHS: Sample Information

Large nationally-representative samples of women between the ages of 15 and 49 Part of collection of DHS datasets on population, health, HIV, and nutrition for 85+ countries ( http://www.measuredhs.com/) Used the individual recode and merged in variables on household composition from household member recode Sample sizes ranged from 7,131 women in Maldives to 124,385 in India Disadvantages: Employment may be measured with error as compared to using labor force surveys; women officially unemployed grouped together with women out of labor force Advantages: Allows for comparable regressions across countries; provides extensive information on womens productivity characteristics, household composition, and household wealth not contained in most labor force surveys

Methodology
Empirical strategy: measure the effects of womens individual characteristics, household wealth, and household composition on womens employment decisions Estimation equation: Dependent variable: binary variable for whether or not the woman is currently employed Regressions performed with cross-section data at the
individual level, separately for each country

Use probits (and report marginal effects) Tolerance statistics estimated to test for the presence of multicollinearity among full set of independent variables Standard errors corrected for clustering at the level of the household

Findings using the DHS

Wealth effects In six countries, women from higher wealth quintile households less likely to be employed as compared to those from the lowest wealth households
Bangladesh, India, Indonesia, Nepal, Pakistan, and Timor-Leste: economic necessity pushes women from low-wealth households to engage in market-based work

In remaining three countries, women from wealthier households are more likely to be employed as compared to women from the poorest households
Maldives and Philippines: relatively more developed economies; low socioeconomic status among households does not play as strong a role in pushing women to be employed Cambodia: other variables related to income are capturing the income effect (womans education, having access to safe water, and living in urban area)

Similar findings for education effects

Womens Employment Determinants: Marginal Probabilities, 2005-09

Bangladesh Cambodia India Indonesia Maldives Nepal Pakistan Philippine s TimorLeste Household wealth index (reference: 1st quintile) 2nd quintile -0.021 (0.017) 3rd quintile -0.102*** (0.017) 4th quintile -0.120*** (0.020) 5th (richest) quintile -0.216*** (0.020) 0.001 (0.015) 0.029* (0.015) 0.034** (0.017) -0.006 (0.025) -0.042*** (0.007) -0.104*** (0.007) -0.206*** (0.007) -0.294*** (0.007) -0.017 (0.015) -0.028* (0.016) -0.063*** (0.018) -0.027 (0.019) -0.009 (0.019) -0.031 (0.019) 0.032 (0.026) 0.100** (0.042) -0.130*** (0.024) -0.209*** (0.026) -0.275*** (0.029) -0.439*** (0.030) -0.073*** (0.016) -0.113*** (0.015) -0.186*** (0.014) -0.248*** (0.014) 0.015 (0.019) -0.007 (0.021) 0.038* (0.022) 0.115*** (0.023) -0.050*** (0.016) -0.042** (0.017) -0.082*** (0.018) -0.050** (0.025)

DHS findings
Effect of marriage and children Marriage is associated with lower employment, with large and statistically significant coefficients in every country except Nepal and the Philippines Across all countries, having young children reduces womens employment:
A child under the age of five reduces probability that a woman is employed by 1% (Pakistan) to 10% (Indonesia), with an average of about 4% across the region

But that effect tends to fade as children get older

A child above the age of five can raise or lower probability a woman is employed or have no effect depending on the country and age of the child

Womens Employment Determinants: Marginal Probabilities, 2005-09

Bangladesh Cambodia Number of children (linear) <5 yrs old -0.047*** (0.007) 5-12 yrs old 0.010* (0.005) 13-17 yrs old -0.029*** (0.007) -0.034*** (0.007) 0.003 (0.004) -0.038*** (0.006) -0.037*** (0.003) 0.009*** (0.002) -0.022*** (0.003) -0.095*** (0.007) -0.006 (0.005) -0.003 (0.007) -0.029*** (0.009) 0.002 (0.007) 0.003 (0.008) -0.027*** (0.007) 0.008** (0.004) -0.016** (0.007) -0.014*** (0.005) -0.002 (0.004) -0.002 (0.005) -0.046*** (0.006) 0.005 (0.005) -0.031*** (0.006) -0.018*** (0.006) -0.019*** (0.004) -0.019*** (0.006) India Indonesia Maldives Nepal Pakistan Philippines TimorLeste

Issues to highlight for ADO

Importance of womens participation in formal labor markets to make growth inclusive Policy reforms play a role Improve womens wages and working conditions Improve compatibility of womens market work with household responsibilities
Maternity and parental leave benefits Support for child care schemes

Promote enabling policies so women in informal sector and agriculture become less marginalized
Microfinance, rural banking reforms, training programs, provision of business-development services, stronger property rights, gender-responsive social protection measures